SAVILLS: Brexit and the US election will lead to 'lower volumes' of property deals

Pexels Savills, the real estate group, said it expected "relatively lower volumes" of property deals as the market digests the fallout from the UK's vote to leave the European Union and uncertainty over the US election.

"We anticipate a period of relatively lower volumes as markets adjust to events," Savills said. "This will present opportunities for investors seeking to deploy capital particularly into the UK and European markets."

Savills said the dampening effect of political uncertainty on the market was balanced out by lack of housing supply and central banks' policy of keeping interest rates low.

"Recent events have also reversed opinion about the direction of interest rates in most markets, furthering the attraction of the spread between real estate yields and the cost of borrowing," Savills added in its half year report. "In key cities, such as London, Frankfurt, Hong Kong, Shanghai and New York, supply remains constrained and occupier demand relatively resilient."

Fee income on UK residential property deals was up 10% in the six months ending June 30 but earnings on commercial transactions plunged 23% in the same period, as investors waited for the outcome of the June 23 referendum.

"In Central London, many of the hitherto significant buyers (Sovereign Wealth, International Private Equity) elected to remain largely on the sidelines during this period, which opened the way for Private Wealth from areas such as the Middle East to transact," Savills said.

This is the lowest reading since mid-2008 when the financial crisis was in full swing.

Just over a quarter of surveyors said they expected a further drop in sales across the UK for the coming three months, which is the "most negative reading for near term expectations since 1998," according to RICS.